Leaders of the UK’s small businesses could get as much as three and a half weeks of productive working time back if they fully embraced even basic technology, a major new report has found.
The report, Time is money: How adopting technology can make businesses more productive, took a deep dive into the small business community’s day-to-day relationship with common tech tools and found that despite significant strides forward, worrying gaps in uptake remain.
For example, just 14 per cent claim to use third-party storage for backing up data, and only 29 per cent say they use a customer relationship management system.
With even more effective tech tools including advances in generative artificial intelligence (AI) on the horizon, the report found that without support, the UK’s SMB community will miss out on time savings, greater security, evidence-led decision-making, new sales and, ultimately, business success.
Emma Jones, CBE, founder and CEO of small business support platform and membership community Enterprise Nation, said, “Technology is indispensable for businesses looking to boost productivity, enhance security, and use data to guide better decisions. Smaller firms still feel the barriers to realising the benefits that come with adopting technology.
“The findings from this report have important implications for the UK economy. Tech tools are available to improve business operations and we want business owners to have full access to these tools and the skills to make the most of them.
“Unlocking the benefits of adopting tech will require a collective effort to address the barriers – from the tech industry, government, business support providers and business users themselves, which is why we launched Tech Hub earlier this year. There is absolutely no doubt tech tools can provide an achievable path towards greater success and resilience for small firms across the UK.”
Jo Wedlock, Brand, Marketing and Communications Director, Vodafone Business UK said: “The findings in this report underline the importance of technology and the underlying connectivity that will help SMBs grow and thrive. It also highlights the need for Government and technology providers to come together to coordinate support, and that is exactly what Vodafone is proud to be doing through the Tech Hub alongside Enterprise Nation and our partners.”
Aine Rogers, Managing Director of Small and Medium Enterprise at Cisco UK & Ireland, said, “Having the right technology in place is key for SME productivity.
“As the world becomes ever more connected, it can also enable SMEs to access new markets, tap into new pools of talent and drive innovation by reaching customers in new ways.
“When it comes to digital transformation, SMEs have a big advantage: agility. It has never been simpler and more affordable to adopt cloud-based solutions, and there are a host of free resources available to help support the digital skills of employees, such as the Cisco Networking Academy, which has a series of free, self-paced training courses.”
The report, which follows the launch of a new generation Tech Hub which aims to be a universal one-stop-shop solution for the UK’s 5.6m SMBs, found 70 per cent of respondents said the cost of software licences was the main reason they hadn’t yet adopted technology.
But skills and confidence also play pivotal roles in how tech transforms businesses. The report found that despite 77 per cent of businesses using cloud storage, file sharing and simultaneous editing, only 31 per cent of respondents felt ‘very confident’ their business had the skills to use the technology.
Businesses have the least confidence in using point of sales systems (28% not confident at all they have the skills to use it), customer service workflow automation (27%), and speech recognition software (24%).
But the report also highlighted gender disparities with actively keeping up with trends in business technology. While overall, more than three-quarters of businesses (77%) regard themselves as ‘active’ in keeping up with trends, the difference between male and female founders is a cause for concern. The report found 43 per cent of men say they are ‘very active’ at keeping up with technology trends, compared to just 21 per cent of women.
- Reward businesses for adopting technology with new financial support
Consider leading tech powers like Singapore with its Go Digital programme and South Korea with its Digital New Deal. Go Digital offers a range of highly targeted, upfront financial and intellectual support tailored to sectors, from its ‘Chief Technology Officer As a Service’ offer to sector specific grants, linked to the objectives of the country’s industrial strategy.
- Offer targeted tax incentives, and time-limited subsidies, to support businesses with the cost of adopting technology
Our survey shows that the cost of software licences – perceived or actual – is preventing the smallest businesses from adopting new tools and becoming more productive. The UK’s Help to Grow: Digital (H2GD) scheme offered subsidised software licences across a small number of use cases but was closed early due to a lack of uptake. Our survey suggests that if it was better targeted to more contemporary tech use cases (determined through regular review by subject-matter experts) and extended to smaller businesses, a revamped scheme could help drive adoption through reducing the upfront cost.
In addition, to support investment in digitalisation, government should consider offering enhanced tax reliefs for expenditure on digital services. We recommend an enhanced support of 140% on the first £50,000 of expenditure on productivity enhancing digital services, which equates to an additional 40% versus standard business expenditure. This will empower small and medium-sized businesses (SMEs) to embrace digitalisation and harness emerging technology, such as AI, to become more productive and grow sustainably.
- Invest in new training programmes and support designed to introduce small business owners to emerging technology, and to ease their concerns where legal reasons are stopping them from using the tech effectively
After the cost of licences, the second most frequently cited barrier to adopting tech is ‘a lack of skills within the business’. But our survey also finds that businesses adopt and use tech tools, even when lacking the confidence to realise the tools’ full potential. This suggests that with access to the right training and support, there is scope for increasing adoption and improving how businesses use the tech they already have.
Tech Hub is supported by British telecommunications leader Vodafone UK, global tech innovation firm Cisco, market leading SMB technology companies Sage and Google and built by business support platform specialist Enterprise Nation. It is backed by the professional body for technology, BCS, The Chartered Institute for IT.